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Petroleum News: OPEC holds output, prices fall below $68

Crude oil prices fell below $68 a barrel Jan. 31 after OPEC ministers said the group had decided to hold production steady.
Light, sweet crude for March delivery on the New York Mercantile Exchange dropped 40 cents to $67.95 a barrel in electronic trading by afternoon in Europe. March Brent crude futures fell 73 cents to $65.86 a barrel.
Heating oil fell nearly a cent to $1.8250 a gallon, while gasoline lost more than a cent and a half to $1.7584 a gallon. Nymex natural gas fell 6 cents to $9.330 per 1,000 cubic feet.
OPEC’s decision had been widely expected after two days of informal meetings by the cartel’s 11 members. Qatari oil minister Abdullah bin Hamad al-Attiyah said a cut in output would be discussed at the March meeting.
“We’re very pragmatic,” he said, adding that talks about any cuts would take place later.
But Saudi oil minister Ali Naimi, one of the most influential voices in OPEC, said he didn’t believe a cut would be needed at the next meeting.
That sentiment was shared OPEC President Edmund Daukoru, who said earlier that he doesn’t see a cut in the group’s production ceiling as likely when the group meets again, and it wouldn’t affect second-quarter supply if the group agreed to do so.
Decision on production unamimous
Naimi said the groups’ decision to hold steady was unanimous and added that at no time did concerns about Iran’s likely showdown with the west over its nuclear ambitions come to bear on the decision.
The possibility that Iran could be referred to the Security Council for economic sanctions over its nuclear program has kept markets jittery of late.
Iran, OPEC’s second-largest oil producer, insists its nuclear program is aimed at generating electricity, but the U.S. and other countries fear the research cold be used to create nuclear weapons.
The U.S., Britain, France, China and Russia agreed Jan. 31 that Iran should appear before the U.N. Security Council, where the five countries are permanent members, over its nuclear program.
They called on the International Atomic Energy Agency, the U.N. nuclear watchdog, to report the Iran case when it meets in Vienna on Feb. 2. The U.N. Security Council could impose sanctions or take other harsher action against Iran.
—The Associated Press

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